Acting Spanish PM Mariano Rajoy has had his bid to form a "grand coalition" following his second election victory turned down.

His ruling Popular Party won 137 seats in Sunday's unprecedented repeat vote, which was still short of the majority in the 350-seat parliament that it enjoyed after the 2011 election.

Mr Rajoy's party also won the December election but no other major party was willing to help him form a government - a scenario that could happen again.

The party's leadership is meeting on Monday to review its options. Prior to that, Mr Rajoy, 61, told Cope radio he would again push for a "grand coalition" with the Socialists, who placed second on Sunday, winning 85 seats in their worst-ever result.

But Socialist party spokesman Antonio Hernando said: "We are not going to support Rajoy's investiture nor abstain."

Mr Rajoy's best option would now appear to be to strike a deal with the business-friendly Ciudadanos party, which came in fourth with 32 seats.

Ciudadanos leader Albert Rivera rejected backing any government led by Mr Rajoy following the December vote, but recently suggested he might ease that stance.

That would still leave the acting PM needing the support of smaller groups to make a majority.

In third place, with 71 seats, was the left-wing Unidos Podemos (United We Can) group, which brings together the communists, the Greens and the two-year-old Podemos party that grew out of a grassroots anti-austerity protest movement.

The alliance, headed by pony-tailed political science professor Pablo Iglesias, had hoped to overtake the Socialists and break the country's traditional two-party system.

Spain has never had a coalition government and the Popular Party and the Socialists have alternated in power for decades.

King Felipe VI will consult party leaders in the coming weeks and likely nominate one to try to form a government.